Abstracts Are As Good As Gold

In another display of the importance of new trial data moving the financial markets, the Wall Street Journal reports this morning on the power of preliminary scientific study abstracts sent to physician-members ahead of their annual meeting to move pharmaceutical markets.

Shares of ImClone Systems have tumbled more than 9% since Tuesday on heavy volume after embargoed data from an important cancer trial was released to 24,000 physicians expected to attend the conference of one of the largest oncology groups, the American Society of Clinical Oncology, or ASCO. Shares of Regeneron Pharmaceuticals have fallen almost 15% since and Genentech is down 3%, while Onyx Pharmaceuticals is up almost 10%, as investors pass around abstracts, or summaries, of data to be released as part of the ASCO meeting.

Although the abstracts are sent with a “warning” instructing the recipient not to “publish the information or provide it to others or use it for trading purposes,” according to Kristin Ludwig, senior director of communications and patient information at ASCO. Certainly, ASCO must be aware of this practice: why would they even mention the use for “trading purposes” in their instructions to their members?

But it seems doctors get to take the fall:

Doctors who trade on the information could be in violation of insider-trading laws, say securities experts. If they tell another investor about the data it gets murkier, but it could be problematic if the doctor knows that the recipient will trade on the information.

Hey, if you release the information to 24,000 members of a society – it seems that those abstracts are pretty public information to me.

-Wes